Wheat and Corn prices initially trended higher due to increase in demand growth. But, later the good weather in the US increased the supply outlook that dragged down the prices. The sugar prices that initially trade lower due to increase in supply from Brazil, later sugar prices moved up as the import demand from China increased.

On Wednesday last week, Wheat for December delivery advanced by 0.8% to $6.6925 a bushel. The corn for December delivery too climbed up by 0.9% to $4.9075 a bushel. But, on Thursday, Wheat prices declined by .15 % to $6.585 a bushel, while the corn prices too dropped by 0.05% down at $4.805 a bushel, after hitting a session low of $4.785 a bushel. Sugar for October delivery too fell by 0.7% by $476.30 a metric tonne.

On Friday weekend, Corn for December delivery dropped by 1.04 percent to $4.765 a bushel, which reduced its weekly gain by 1.6%. Wheat for December delivery too was down by 0.19% at $6.530 a bushel and on track for an overall 1.7 percent decline for August month.

The wheat prices were boosted by the increase in demand outlook due to the increase in the Wheat imports from Egypt, the world’s biggest importer. The Egyptian imports are reported to have increased to 60,000 tonnes of wheat on Wednesday.  On the other hand, the sugar prices declined due to increase in the export level from Brazil.

Brazilian millers have diverted much of their cane sugar for producing more sugar at the cost of lesser ethanol production causing the Sugar price to decrease.  According to the Brazilian industry group Unica, the millers of the center-south, which is the main sugar producing region, diverted around 47.8 percent of the cane sugar crops to sugar production in the first half of August. This is a 45% increase compared to production levels 2 weeks ago. This is because due to Brazilian real depreciation the sugar has become more profitable than ethanol.

Later, on Thursday, the US National Weather Service data predicted lower temperatures in the Midwest region, with bright possibilities of moderate rain that will further cool down the temperatures. This alleviated the concerns of crop damage and reduction in yield due to the previous dry weather conditions.

On Monday this week, the White Sugar for October delivery edged up by 0.2% to $479 a tonne. On Tuesday, the corn delivery for December climbed up by 1.5% to $4.8925 a bushel, while the December delivery for wheat too gained by 0.88% to $6.5975 a bushel.

Meanwhile, on the same day Raw sugar for October delivery too appreciated by 0.98 % higher to $0.1645 as of 15:08 BST in NYSE LIffe. The White sugar delivery for the same month inched up by 0.2% to $478.50.

According to the International Sugar Organization, the Sugar demand outlook is increasing due to more imports from China and Middle East. In the past three weeks of August, the Sugar refineries of China and Middle East have consumed about 700,000 metric tonnes of Sugar a clear sign of growth in the demand for Sugar.

On the other hand, the US National Weather Service data reported on Monday that US, the largest exporter of wheat and corn, has been suffering from a dry weather than the usual causing concerns of a potential fall in the yields. This pushed up the prices of Wheat and Corn even though the Eurozone is touted to produce 0.4% more than the previous market predictions.

Thus, the Sugar prices started trading higher notwithstanding the increase in production from Brazil. On the other hand, the corn and wheat prices edged up buoyed by dry weather concerns reported by US Weather service.

However, if the fresh forecast rise in grain production from Europe materializes, the market will be adequately supplied. This might possibly drag sown Corn and Wheat prices in the coming days.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.